Today the GCC’s total retail space exceeds 10 million square meters, and it is estimated to grow 46 percent by 2015. GCC’s retail market is set to reach USD 221 billion by 2015, according to the Kuwait Financial Centre “GCC Retail Report”, while Alpen Capital forecasts GCC retail industry to cross the USD 270 billion mark by 2016. “The future for the shopping centers in the GCC region is very bright. Not only are the shopping centers a prime source of providing a quality social experience, they are also a place where consumption of goods and services is part of the culture. Communities thrive where the shopping centers are a focal point providing a clean, safe and vibrant environment”, told us Mr. Macadam.
285 square meters for every 1,000 people
The newest data by Al Asmakh Real Estate Development Company (AREDC) supports the forecast as well. In Qatar, which now has 13 operational malls, 14 new malls are planned with approximately 1.228 million square meters of Net Leasable Area (NLA). Six malls will be opened in next eight to 18 months, offering additional 384,500 square meter area – 67 percent of existing squarage. By end of 2015, the anticipated NLA is nearly 954,500 square meters. Upon completion of all the under construction malls, the total amount of malls is going to be 27 with the expected NLA of 1.8 million square meters, reveals the report covering the first quarter of 2014.
At the moment, organized retail space within Qatar offers nearly 285 square meters for every 1,000 people and will upon completion of all under construction malls reach 900 square meters. Dubai already offers 1, 380 square meters of retail space per 1,000 people (highest in the world), whereas in the US the ratio is 1, 030 square meters for every 1,000 people, according to ARDEC report. Report predicts that at the end of 2018, the major retail activities in Qatar would be managed from the malls, and that the retail segment would remain a center of the investment.
David Macadam explains that the mushrooming of the shopping malls in Qatar and the region is a fresult of many factors. “The infrastructure in the GCC countries is improving yearly. Increased power and water generation capability enables the growth of large scale retail developments. New airports and efficient visa handling procedures enable large numbers of people to travel easily and freely for leisure and shopping excursions. New brands are flocking to the region looking to increase their reach globally and to penetrate the lucrative GCC customer”, says Mr. Macadam. Tourism remains a key driver for the GCC retail industry with tourist arrivals in the GCC expected to reach 44.4 million in 2016.
5-hour shopping sprees on average
David Macadam is convinced the large shopping centers have a massive and positive impact on the spending habits of the GCC residents, with shoppers spending on average of five hours per visit in malls. The longer the dwell time, the greater the likelihood of increased spending, he says. “Shopping centers such as Mall of the Emirates in Dubai have been ranked over the past five years as the number 1 to number 7 shopping center in the world when measuring the gross annual sales revenues. Sales densities per square foot per year consistently reach nearly $1,800 per square foot of the Gross Leasable Area (GLA). In Dubai the Mall of the Emirates is approximately 2.5 million square feet (230 000 square meters) GLA. Dubai Mall is approximately 3.77 million square feet (350 000 square meters) GLA. Both are undergoing renovations to add significantly more GLA to the already large footprint.
In Doha, Villagio, Mall of Qatar and Doha Festival Centre are all super regional malls with areas up to 2.9 million square feet (270 000 square meters). Kuwait with Avenue and 360 Mall also boasts large scale shopping centers with areas up to nearly four million square feet (371 000 square m) GLA. Accommodating more brands, more leisure opportunities and more food & beverage choices ensures these shopping centers and many more like them continue to thrive” concludes Mr. Macadam.